The automatic stay provides a period of time in which all judgments, collection activities, foreclosures, and repossessions of property are suspended and may not be pursued by the creditors on any debt or claim that arose before the filing of the bankruptcy petition. A stay of creditor actions against the debtor automatically goes into effect when the bankruptcy petition is filed. The stay provides a breathing spell for the debtor, during which negotiations can take place to try to resolve the difficulties in the debtor's financial situation.

In Minnesota, as in all states, the automatic stay is a fundamental provision of the federal Bankruptcy Code (11 U.S.C. § 362) that takes effect immediately upon the filing of a bankruptcy petition. The automatic stay temporarily halts most creditors from taking collection actions against the debtor or the debtor's property. This includes stopping lawsuits, wage garnishments, and even phone calls demanding payments. The stay is designed to provide a 'breathing spell' for the debtor, during which time the debtor's financial affairs can be sorted out without the pressure of pending litigation, foreclosure, or repossession. It also stops any attempts to create, perfect, or enforce a lien against the debtor's property. However, there are exceptions to the automatic stay, and in some cases, a creditor may be able to obtain relief from the stay from the bankruptcy court. It's important for debtors to understand that the automatic stay is temporary and does not eliminate the underlying debts, which are addressed through the bankruptcy process itself.